Gen Digital Q2 Earnings Call Highlights

Key Points

• Gen Digital delivered a strong fiscal Q2: Revenue increased 12% year over year to $1.37 billion, bookings rose 10% to $1.35 billion, and adjusted EPS climbed 19% to $0.74. Paid customers reached 83 million, up 6 million from a year earlier.
• Trust-Based Solutions was the primary growth engine, with revenue up 26% and bookings up 24%, while Cyber Safety revenue grew 5% through broader memberships, upgrades and upsells. Partner-channel revenue surged 40%, and Gen cited AI-driven efficiencies in support, advertising and software development.
• The company raised its fiscal 2027 outlook to $5.465 billion–$5.515 billion in revenue and $2.93–$2.98 in adjusted EPS. Gen generated $323 million in free cash flow, returned nearly $250 million to shareholders and said it remains focused on organic investment, buybacks and disciplined acquisitions.

Gen Digital NASDAQ: GEN reported double-digit revenue and bookings growth in its fiscal second quarter of 2027, supported by continued expansion in its cyber safety and trust-based solutions businesses. The company also raised its full-year revenue and earnings outlook.

Revenue rose 12% year over year to $1.37 billion, exceeding the high end of the company’s guidance range, while bookings increased 10% to $1.35 billion. Non-GAAP diluted earnings per share increased 19% to $0.74, above the company’s prior guidance of $0.71 to $0.73. Gen reported non-GAAP operating income of $686 million, up 10%, with a 50% operating margin.

“Q2 was another beat and raise quarter for Gen,” Chairman and CEO Vincent Pilette said. The company ended the quarter with 83 million paid customers, up 2 million sequentially and 6 million from a year earlier.

Cyber Safety Growth Supported by Membership Adoption

Gen’s Cyber Safety segment generated 5% revenue growth, driven by adoption of broader memberships, customer upgrades and upsells. Pilette said Norton 360, the company’s flagship product, has reached an annualized revenue run rate of more than $1.7 billion and has continued to grow at or above a mid-single-digit rate.

Chief Financial Officer Natalie Derse said higher-tier Norton 360 memberships reached a record share of total memberships. The company said customers moving to higher membership tiers and multiple products have produced retention and average revenue per user increases of 5 to 10 points for those cohorts.

Cyber Safety operating margin reached 62% during the quarter. Gen said it continues to manage the segment toward mid-single-digit revenue growth and operating margins above 60%.

The company also cited elevated demand for scam protection as artificial intelligence expands potential security risks. Pilette said Gen’s real-time telemetry showed email, text and call scam protection usage increased 30% sequentially. He said breach notices to Gen members rose more than sixfold in the first half of 2026, while U.S. breach notices during the first six months of the year exceeded the total for all of 2025.

Gen is redesigning Norton 360 with next-generation VPN, scam-protection and Safe AI capabilities, while building LifeLock features that pair breach alerts with on-demand, AI-driven resolution.

Trust-Based Solutions Revenue Climbs 26%

Trust-Based Solutions revenue rose 26%, while bookings increased 24%. The segment includes identity protection, personal financial management and the Engine marketplace business. Segment operating margin remained at 30%.

Gen said growth was driven by financial wellness adoption and a diversified partner and vertical strategy at Engine. The company added 18 new partners during the quarter, while top-of-funnel matched product inquiries in its marketplace more than doubled from a year earlier.

Derse said MoneyLion’s Instacash product recorded strong origination volume growth, including a record number of newly onboarded users and increased advances per user. MoneyLion One, the company’s recently introduced membership product, has shown early signs of stronger engagement as members move more savings and direct deposits to the platform, she said.

Pilette said the company is building MoneyLion into a more frequent financial relationship centered on cash-flow management, deposit products, credit-building and identity protection. He added that most MoneyLion revenue comes from repeat customers.

The company also recently launched Norton Money Workplace, a financial wellness offering for employee-benefit channels. Pilette said its qualified pipeline exceeded $30 million ahead of the enrollment season.

Partner Channels and AI Efficiencies

Partner-channel revenue increased 40% to $295 million, with double-digit growth across employee benefits, financial marketplace and telecommunications channels. Partner revenue now represents more than 20% of Gen’s total revenue. Direct revenue rose 6% to $1.074 billion.

Derse said employee benefits produced its strongest growth in more than five quarters, as Gen expanded its broker network, sales effectiveness and product portfolio. The company expects its expanded financial wellness offerings to complement cyber safety products in that channel.

Gen also cited artificial intelligence as a source of operational leverage. Operating expenses totaled $415 million, or 30% of revenue, down 150 basis points sequentially and 230 basis points from a year earlier.

• Its AI creative studio produced four times as many advertising assets as a year earlier at a fraction of agency costs.
• AI resolved roughly half of customer-support contacts end to end, according to the company.
• Gen said 75% of code shipped during the first half was AI-written, and engineering productivity increased 20% since the start of the fiscal year.

The company generated $326 million in operating cash flow and $323 million in free cash flow during the quarter. It ended the period with $589 million in cash and net leverage below 2.9 times after repaying $45 million of debt.

Gen returned nearly $250 million to shareholders through dividends and share repurchases, including $171 million of share buybacks. The company said $1.8 billion remains under its current repurchase authorization.

Outlook Raised; M&A Remains Disciplined

For the fiscal third quarter, Gen expects revenue of $1.365 billion to $1.39 billion, representing growth of 10% to 12%, and non-GAAP EPS of $0.73 to $0.75, up 15% to 18%.

For fiscal 2027, the company raised and narrowed its revenue outlook to $5.465 billion to $5.515 billion, representing 10% to 11% growth. Previously, Gen forecast 9% to 11% growth. It raised its non-GAAP EPS outlook to $2.93 to $2.98, or 16% to 18% growth, from prior guidance of 14% to 18% growth.

Pilette said Gen’s outlook does not depend on an acquisition and emphasized that the company is not currently pursuing a transformative deal. He said the company will continue to evaluate partnerships, investments and acquisitions based on strategic fit and return on invested capital, while prioritizing organic investment, buybacks and debt repayment.

About Gen Digital (NASDAQ:GEN)

Gen Digital Inc NASDAQ: GEN is a cybersecurity company that provides digital safety, privacy, and identity protection products for consumers. Its services are designed to help protect devices, personal information, online accounts, and digital identities from malware, fraud, identity theft, scams, and other cyber threats.

The company operates a portfolio of consumer brands that includes Norton, Avast, LifeLock, Avira, AVG, ReputationDefender, and CCleaner. Its offerings include antivirus and device security software, virtual private network services, password management, identity theft monitoring and restoration support, privacy tools, scam protection, and performance and optimization utilities.

Gen Digital serves customers internationally through direct subscriptions and distribution partnerships.

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